Drug Labels Can Provide The "Specific Intent" Required For Inducement Of Infringement

In DSU Medical Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc in relevant part), the Federal Circuit held that inducement of infringement under section 271(b) requires a "specific intent" to infringe. A general intent to encourage direct infringement will not establish a successful inducement claim. But the court failed to provide any guidance on establishing the requisite intent. In pharmaceutical cases, however, specific intent may be established by the wording of a drug label, particularly in Hatch-Waxman cases.

Inducement is particularly relevant in pharmaceutical litigation as method-of-use claims are infringed under section 271(b). Conventional principles of induced infringement apply in determining infringement under the Hatch-Waxman Act. See Warner- Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003). First, the inducer must have knowledge of the asserted patent. See Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2070 (2011). In Hatch-Waxman actions, this knowledge is easily proven by reference to the Orange Book. Moreover, the filing of a paragraph IV certification undoubtedly shows that a generic manufacturer had actual knowledge of any patents that claim the proposed method-of-use. See, e.g., Bone Care Int’l, L.L.C. v. Roxane Labs., Inc., 2012 WL 2126896 (D. Del. June 11, 2012). Therefore, once direct infringement is established, a plaintiff must only prove that the generic manufacturer had the specific intent to induce infringement. Such intent may be inferred from evidence of a sales force, advertisements in medical journals, direct marketing to doctors, or funded research or meetings on the claimed method. See Warner-Lambert Co. v. Apotex Corp., 2001 WL 1104618, at *3 (N.D. Ill. Sept. 14, 2001), aff'd, 316 F.3d 1348 (Fed. Cir. 2003).

In addition, the language in the label of the proposed generic drug should be carefully scrutinized as labels—by themselves— can often establish the requisite intent. But see Aventis Pharma Deutsch GmbH v. Cobalt Pharmaceuticals, 355 F. Supp. 2d 586, 597 (D. Mass. 2005); Organon, Inc. v. Teva Pharm., Inc., 244 F. Supp. 2d 370, 382 (D.N.J. 2002). Regardless of the precise wording in a label, an intent to induce infringement will not be inferred where the drug product has "substantial" noninfringing uses, even if the alleged inducer knew that some potential uses would infringe. Noninfringing uses are "substantial" when "they are not unusual, far-fetched, impractical, occasional, aberrant, or experimental." Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1327 (Fed. Cir. 2009). For example, the Federal Circuit declined to infer the requisite intent when merely 2.1 % of prescriptions for the accused drug infringed. See Warner—Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003); see also Acorda Therapeutics Inc. v. Apotex Inc., 2011 WL 4074116 (D.N.J. Sept. 6, 2011), aff’d, 476 F. App’x 746 (Fed. Cir. 2012) (finding that the defendant did not induce infringement because, inter alia, noninfringing uses were approximately 75%).

Substantial noninfringing uses, however, will not always preclude a finding of inducement. In Toshiba Corp. v. Imation Corp., 681 F.3d 1358, 1364-66 (Fed. Cir. 2012), the Federal Circuit vacated and remanded a summary judgment of no inducement even though the accused product had substantial noninfringing uses. Because the accused infringer provided instructions for using the product in a manner that would result in direct infringement, the court held that an issue of fact existed as to whether a jury could find the requisite specific intent.

An inducement claim can support an action under section 271(e)(2) only if the alleged infringing use is an FDA-approved use. Off-label uses will not support a claim under
§ 271(e)(2). See Allergan, Inc. v. Alcon Laboratories, Inc., 324 F.3d 1322, 1331 (Fed. Cir. 2003); Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1364-65 (Fed. Cir. 2003). If the use is FDA approved, the pertinent question becomes whether the generic's proposed label instructs users to perform the patented method[1]. See Vita—Mix, 581 F.3d at 1329 n.2 ("The question is . . . whether [the] instructions teach an infringing use of the device such that we are willing to infer from those instructions an affirmative intent to infringe the patent."). Apposite is Hoffmann La-Roche Inc. v. Genpharm Inc., 2-07-cv-04661, slip op. (D.N.J., Sept. 2, 2010), where the court granted summary judgment of induced infringement because the instructions evidenced the required specific intent. Similarly, in Wyeth v. Sandoz, Inc., 705 F. Supp. 2d 508, 521 (E.D.N.C. 2010), the court granted summary judgment of induced infringement because "the label provide[d] instructions for and encourage[d] direct infringement thereby establishing the requisite intent for active inducement of infringement." Moreover, in Abraxis Bioscience, Inc. v. Navinta, LLC, 640 F. Supp. 2d 553, 570 (D.N.J. 2009), rev’d and vacated on other grounds, 625 F.3d 1359 (Fed. Cir. 2010), the court noted that "statements in a package insert that encourage infringing use of a drug product are alone sufficient to establish intent to encourage direct infringement." (emphasis added). See also Eli Lilly & Co. v. Actavis Elizabeth LLC, 435 F. App’x 917, 926 (Fed. Cir. 2011) (holding that the sale of a drug specifically labeled for use in the patented treatment induced infringement); Genentech, Inc. v. Trustees of Univ. of Pennsylvania, 871 F. Supp. 2d 963, 978 (N.D. Cal. 2012) (denying defendant's motion for summary judgment of no inducement because a jury could find that the defendant knew its product infringed plaintiff's patented treatment method and nonetheless continued to encourage the infringing use).

In the leading decision of AstraZeneca LP v. Apotex, Inc., 623 F. Supp. 2d 615, 619 (D.N.J. 2009), the lower court enjoined the launch of a generic drug and held that Apotex's conduct of knowingly submitting a label that infringed plaintiff’s patents showed a specific intent to infringement. The Federal Circuit affirmed and found the label would inevitably lead some doctors to practice the patented method. AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1060 (Fed. Cir. 2010). Significantly, the label did not specifically track the claim language, which required administration of a specific dosage to a patient. Rather, the court held that physicians would titrate the label dosage downward, and this titration would necessarily lead to the claimed dosage and thus infringement.

More recently, the Federal Circuit, in Bayer Schering Pharma AG v. Lupin, Ltd., 676 F.3d 1316, 1321-22 (Fed. Cir. 2012), affirmed the lower court's decision finding no induced infringement because the FDA-approved label did not indicate to physicians that the specific three-pronged use claimed in the patent was safe and effective. The patent stated that the claimed method simultaneously treated three conditions. The label, however, only specified the use of the drug as treating one of the three conditions. Indeed, only that one treatment was described as safe and effective. Even though the label discussed the other two conditions, the court held that the label did not induce infringement. Judge Newman dissented because, when the drug was administered, all three conditions were treated.

Where a proposed label does not direct any action on the part of the physician or patient, but merely provides information a physician can draw upon when prescribing a drug, the label does not induce infringement. This situation is exemplified by the recent decision in United Therapeutics Corp. v. Sandoz, Inc., 3:12-cv-01617-PGS-LHG (D.N.J. August 29, 2014). There, Sandoz filed an ANDA covering, inter alia, the use of treprostinil sodium marketed as REMODULIN®. The original ANDA induced physicians to prescribe "Sterile Diluent for Floxan" for use in connection with the generic product. The parties agreed that this use would infringe. But the ANDA was later amended to eliminate any mention of Sterile Diluent for Floxan as an adjunct to REMODULIN® therapy. The use of this diluent was a key step in the claimed process.

United claimed that the warnings and precautions in the generic product label were "so unusual" and "so severe" that they amounted to an implicit instruction to physicians to dilute the generic REMODULIN® with Sterile Diluent for Floxan. Indeed, numerous sections of the label stressed the possibility of infection, which United alleged was an implicit instruction to prescribe Sterile Diluent for Floxan with the generic drug. The court, however, noted that "there is a rather significant difference between a warning and an instruction." Slip Op. at 30. And, "the instructions must be such that a court can 'infer from those instructions an affirmative intent to infringe the patent'." Id. (citation omitted). Thus, it would appear that specific instructions or directions to use the product in an infringing manner are required. See also Novartis Pharma Corp. v. Wockhardt, 2013 U.S. Dist. LEXIS 152141, at 27-31 (D.N.J. Oct. 23, 2013) (dismissing inducement claims where the label did not contain an instruction to infringe).

The Astra Zeneca and Bayer decisions are somewhat at odds. In Astra, how the physician actually used the drug controlled, even though the label did not expressly specify the claimed invention. In Bayer, even though the patent covered the simultaneous treatment of three conditions, and in actual use, the drug treated all three conditions, the label, which specified only one of three uses, controlled and no inducement existed. One wonders if the latter ruling exalts form over substance.[2]

Closer cooperation between patent and regulatory attorneys is needed to prevent generics from easily designing a label that avoids a claim of inducement even where in actual use, the generic and brand compounds perform identically. Original claims are usually crafted well before a label is finalized, but later-added claims should be drafted to mimic more closely the drug label. This practice may help avoid the problems encountered in Bayer.

[1] Product instructions and advertisements in non-pharma cases can often supply the requisite specific intent to infringe. See, e.g., Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1322-23 (Fed. Cir. 2009); i4i Ltd. Partnership v. Microsoft, 598 F.3d 831, 851-52 (Fed. Cir. 2010); Advanced Software Design Corp., v. Fiserv, Inc., 2011 WL 2150989, at *6 (Fed. Cir. 2011).

[2] In situations where the ANDA itself does not resolve the infringement issue, resort to the actual properties of the accused product is warranted. In Watson Laboratories, Inc.—Florida v. Apotex, Inc., 2014-1416 (Fed. Cir. August 22, 2014), the ANDA did not show the dissolution profile of the claimed formulation, a key limitation in the asserted patent. After reviewing actual data, the Federal Circuit reversed the lower court and held that the plaintiff had not proven infringement. By contrast, in inducement situations such as Bayer, the instructions on use—rather than the use itself ? seemingly controls.